Thermo Fisher Scientific Acquires Life Technologies in $13.6B Deal

Waltham, MA-based Thermo Fisher Scientific (NYSE: [[ticker:TMO]]) said today it will pay $13.6 billion to acquire Carlsbad, CA-based Life Technologies (NASDAQ: [[ticker:LIFE]]) following an auction that began in January and initially drew interest from a consortium of private equity firms.

The deal combines two giants of the laboratory equipment and supply business just as the promise of low-cost genetic sequencing is opening important new markets for DNA sequencing, molecular diagnostics, genomics, proteomics, and other “omics” technologies.

Thermo Fisher has about 39,000 employees and generates about $13 billion in annual revenue. Life Technologies has about 10,000 employees, including 1,300 in the San Diego area, and reported sales of $3.8 billion in 2012.

Mark Stevenson, Life Technologies’ president and COO, is expected to have a significant leadership role in the combined company, which will be based in the Boston area. Thermo Fisher says the deal, approved by both boards, consists of about $9.5 billion in cash and debt, and equity of up to $4.0 billion. In addition, Thermo Fisher agreed to assume $2.2 billion in debt.

“We’re especially excited about the new opportunities we will have to leverage our complementary offerings, fueled by a shared commitment to continuous innovation,” Thermo Fisher CEO Marc Casper said in a statement.

The companies emphasized three benefits of the deal:

—Technology and innovation leadership. Life has next-generation sequencing capabilities, with a strong business supplying laboratory consumables for genomics, and molecular and cell biology. Thermo Fisher has market-leading leading business in analytical technologies and specialty diagnostics.

—Life does more than half of its orders online through a highly regarded e-commerce platform, while Thermo Fisher has global reach and commercial strength. The companies expect to expand in Asia.

— Thermo Fisher expects the transaction will immediately and significantly add to its earnings per share. The combination offers an opportunity to realize $275 million in new “operating income synergies” over the next three years, along with $25 million in “revenue synergies.”

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.